How Kenya can attract more Swiss investment

Swiss State Secretary for Economic Affairs Helene Artieda will lead an economic and trade delegation to Kenya for a two-day visit starting today.

The visit, according to Switzerland Embassy in Kenya, will seek to strengthen the economic ties between the two states and will emphasise the investment opportunities in Cleantech field.

The State Secretary will be accompanied by representatives of Swiss businesses in a variety of sectors, which include an information technology provider, tax stamps, a law firm, pharma, engineering, infrastructure, energy, mobility and environment.

Increased trade cooperation with Kenya is one of the goals of the Swiss sub-Saharan Africa Strategy of 2021-24.

“The mission to Kenya is an opportunity for the delegation to form and strengthen partnerships with Kenyan companies to create synergies with Kenyan businesses and authorities,” the embassy says.

“It aims to expose Kenyan companies to Swiss expertise and technology in the Cleantech sector. This will potentially contribute to positive economic developments in the two countries.”

During the visit, the delegation will tour BasiGO, one of the Swiss Investment Fund for Emerging Markets portfolio investee companies.

They will also meet with members of the Swiss Business Community, based in Kenya, visit a technical and vocational training programme, launched by Hilti Foundation and Geberit International Sales AG, and later Mr Green Africa, a plastic recycling business.

The Star interviewed Artieda ahead of the visit.

You have been Secretary of State for Economic Affairs for just over six months, and this trip to East Africa is one of your first trips abroad. Why is Kenya economically important for Switzerland? 

More and more Swiss companies are putting out their feelers to Africa. Africa has gained in importance, not only because it offers interesting growth perspectives or due to its geographical proximity to Europe but also in a move to diversify trade, and thanks to the establishment of the African Continental Free Trade Area.

In Africa, Kenya stands out as a regional economic powerhouse, which is also reflected in the Sub-Saharan Africa Strategy 2021-24 adopted by the Swiss government, which recognises Kenya as an economic lioness with whom Switzerland wants to further intensify investment and trade.

I am convinced there is potential to do more. Already, some 70 companies with a link to Switzerland are active in Kenya, and many larger Swiss companies have established their regional hub here.

The Swiss government approved its Foreign Economic Policy Strategy in 2021. What are the main objectives of the strategy and how it supports the Swiss private sector to invest abroad?

The strategy sets out three objectives: A rules-based international order, access to international markets and advocating for sustainability in economic relations.

To achieve our objectives, we work across a number of instruments and policy areas, from trade agreements to the WTO and other international organisations. Conducting economic missions, such as the one I am leading to Kenya, is another example of how we try to support Swiss businesses.

This is the second Swiss economic and trade mission to Kenya following the one that took place in 2019, which was led by the former State Secretary for Economic Affairs, Marie-Gabrielle Ineichen-Fleisch. What was achieved during that trade mission of 2019, and is this a follow up visit? 

The mission’s objective at that time was to showcase modern Kenya to a larger business audience.

The focus was on the vibrant start-up scene and fintech sector. It is important that Swiss companies get to see for themselves the numerous opportunities Kenya offers. We see Kenya primarily as an economic and trade partner, not as a development partner.

It is encouraging to note positive developments since the last mission despite the Covid-19 pandemic. The bilateral trade volume has steadily increased, and more impact investors from Switzerland are discovering Kenya as a market.

I am careful to draw a direct link, but I’d like to think the positive developments are also thanks to the economic and trade mission of 2019.

President Uhuru Kenyatta, during his visit to Switzerland in 2022, highlighted the role of the newly opened Kenyan Embassy in Bern to strengthen trade and tourism between the two states. Is the Economic and Trade Mission to Kenya another step for further engagement between the two countries?

The opening of Kenya's embassy in Bern is another expression of the desire of our two countries to strengthen our relationship. The same goal is pursued by this economic and trade mission.

However, our cooperation is by no means limited to economic affairs and trade. Switzerland and Kenya cooperate also on multilateral issues. Our cooperation in connection with the UN Security Council is just one example.

Switzerland is for 2023-24 a non-permanent member of this important body and can learn a lot from Kenya’s experience, which had the same role for the last two years.

Another example of our cooperation is the training of international peace missions, where Switzerland provides experts to the International Peace Support Training Centre based in Nairobi.

In science and innovation, we also see an increasing interest of Swiss universities and research institutes to team up with Kenyan partner institutions.

In addition, through its regional cooperation programme, Switzerland supports initiatives to alleviate the consequences of the severe drought situation in Kenya’s northeastern counties.

Sustainable growth is a major area of focus for Kenya’s 2030 development agenda. President Willaim Ruto has said Kenya endeavours to transition to clean energy by 2030. Aligned to this, what goals do you have in mind for this trip?

Switzerland and Kenya share the view that only sustainable economic development has a future. That is why I have made Cleantech a special focus of this visit to explore the many investment opportunities for Swiss companies. Likewise, I would like Kenyan partners to hear for themselves the outstanding solutions that Swiss companies can offer.

Why is it of interest for Kenyan companies to work with Swiss companies on Cleantech?

According to the World Intellectual Property Organisation, Switzerland has been the most innovative country in the world for years. Thanks to research and entrepreneurship, there are many Swiss companies that offer innovative, sustainable and clean solutions, such as in the areas of waste processing and wastewater treatment and irrigation systems.

These sectors are of particular relevance to Kenya. In both Switzerland and Kenya, SMEs are the backbone of the economy. This business structure also makes it easier to find partner companies to jointly contribute to Kenya's sustainable development.

Furthermore, I am very happy to see that many Swiss impact investors are investing in the Cleantech sector in Kenya. Switzerland also has public funds that support such projects in Kenya.

During this mission, I will have the pleasure to visit a Kenyan company that provides public transport bus owners with electric buses and has benefited from an investment by Sifem, Switzerland’s Development Finance Institution.

Kenya faces a major problem in waste and waste-management. What can it do to encourage greater investments from Swiss companies, which could create decent and sustainable jobs?

Reliable legal frameworks, transparency and good local partners are key to attracting investments, regardless of the sector.

In waste management and wastewater treatment specifically, political will is also needed to address these challenges. We feel this is more and more the case in Kenya.

The population and politicians recognise, for instance, that water can be reused by purifying wastewater. Climate change has made us all aware of how precious water is and that it must not be wasted, neither in Switzerland nor in Kenya.

At the CoP27 in Sharm El-Sheikh, the Loss and Damage Fund was established. However, Switzerland is measured on this, instead opting for consideration of existing international institutions for loss and damage before adding another mechanism. What are your concerns?

Loss and damage caused by climate change will increase massively worldwide. It is clear that the international community must deliver support.

However, the current system will not be sufficient to provide adequate aid. We are, therefore, committed to strengthening the international response to loss and damage and closing gaps.

Switzerland will work with others to ensure that this new fund provides effective support to respond to loss and damage. To this end, it should become part of the existing system of various actors in humanitarian aid, disaster relief and development aid.

It is important to Switzerland that all countries with high greenhouse gas emissions contribute to the fund and that the fund primarily benefits the most vulnerable countries.

Nairobi has a thriving tech scene, thus the name Silicon Savannah. Does Switzerland offer partnership platforms where some start-ups can offer solutions in Switzerland? What opportunities do Kenyan companies have in Switzerland? 

As a global innovation leader, Switzerland has a well-established ecosystem with an enabling framework that supports entrepreneurship. Peer-to-peer exchanges between the two countries are facilitated by various Swiss actors, such as Switzerland’s export agency and Switzerland Global Entreprise, which can also provide learning opportunities for tech start-ups.

Besides this, there are partnership platforms, such as the African Science and Business Innovators and Swissnex programmes, that facilitate support for Kenyan start-ups.

The Swiss private sector also offers funding opportunities as well as Swiss tech expertise, such as the Crypto Valley Venture Capital Africa Lab, an accelerator that invests in 100 blockchain start-ups from the African continent.

During your visit, you will also visit a TVET school that trains electricians and plumbers with the support of Swiss companies. Why do these companies invest in vocational training in Kenya?

TVET creates a win-win-win situation. Let me explain why.

Companies from Switzerland that enter the Kenyan market with high-value products depend on skilled workers, so training them professionally is the first winning argument. The young men and women trained win because they gain professional skills that make them more competitive in the labour market.

Kenya as a whole wins thanks to TVET by enhancing its manufacturing capacity. In Switzerland, around 70 per cent of the work force does not pursue a university career but completes an apprenticeship after compulsory schooling. The young people are trained in a company for three to four years and during this time, go to a vocational school two days a week.

The private sector is directly involved as a trainer on the job as well as in setting the curriculum of the TVET schools. Our experiences show that private sector involvement in training is key, as it ensures the diploma holders are trained according to the needs of the labour market.

These professionals are an essential part of the success of the Swiss economy and explains the low unemployment rate, including among the youth.

Lastly, the cost of living keeps increasing globally, including in Switzerland. What can you tell Kenyans struggling to make ends meet?

President Ruto is right to say that social development goes hand in hand with economic development. I am convinced that more trade and sustainable investment will create more jobs in Kenya. This, I believe, will give new perspectives to young people and their families.